Markets had been fairly calm in 2020, up until last week, that is. Nothing earth-shattering yet, but it appears as though volatility is back, with the down days driven primarily by the uncertainty over the coronavirus. During the first 23 trading days of 2020 the S&P 500 has moved up or down at least 1% -- my rather simple definition of a volatile day -- four times, but all four have occurred in the past seven trading days.
It's the somewhat typical reaction to circumstances for which the true severity is unknown. First comes a down day such as Monday, Jan. 27, when the S&P 500 fell 1.57%, followed immediately by an up day of 1%. Then there were a couple calm days, followed by a down day (Jan. 31, down 1.77%) followed by a couple up days, including Tuesday (up 1.5%). It's the most fascinating of roller coasters; we've seen it before, we'll see it again, and when and where it stops nobody knows. Interestingly, for all the back and forth, the S&P 500 is up 2% year to date.
As a side note, growth continues to trounce value in all arenas; the Russell 1000 Growth Index is up 6.17% over the Russell 1000 Value Index , the Russell 2000 Growth Index is up 5.36% over Russell 2000 Value Index, and the Russell Micro Growth Index is up 8.17% over Russell Micro Value Index. It's a large-cap growth market, right now anyway.
Meanwhile, in restaurant land, things are heating up a bit for Bloomin' Brands Inc. (BLMN) , one of the names I believe is most in play for some type of transformative transaction. On Monday, activist investor Jana Partners, which owns 6.4% of Bloomin' Brands and has been trying to drive change at the casual dining chain for years, filed a 13D indicating its intention to nominate two to three candidates for election to the company's board of directors at the 2020 annual meeting.
This is Jana's second go-around with Bloomin' Brands; in late 2017 Jana disclosed an 8.74% stake, pushed for change, and ultimately settled with the company the following February when BLMN agreed to add an independent director to the board. Jana took profits and moved on until last summer, when the activist rebuilt its stake in July and August and reported a 9% stake in a 13D filed last Aug. 20h. Bloomin' Brands shares are up about 18% since Jana began rebuilding its stake.
Bloomin' Brands has been an activist favorite in recent years; it was also a target of Barington Capital up until last year, but the activist had entirely closed its position by last November. Barington had been pushing Bloomin' to spin off its smaller brands (Bonefish Grill, Carrabba's and Fleming's) into a separate entity, leaving its largest brand, Outback Steakhouse, as a stand-alone business.
This could get interesting from here, but I've said that before about BLMN and not much has happened there yet.
